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  • Translator: Ivana Korom Reviewer: Krystian Aparta

  • In February 2013, my wife and I moved to Singapore.

  • Exactly at the same time,

  • Uber has announced it started operations in the country.

  • Now, my wife and I agree on a lot of things,

  • but using Uber was definitely not one of them.

  • While I was excited about the technology

  • and how maybe we don't need to own cars anymore,

  • she felt that every Uber car is here to steal jobs from taxi drivers.

  • And Sarah was not the only one.

  • As the Ubers, Airbnbs and Amazons of the world --

  • what we call "online marketplaces" --

  • as they started expanding their presence,

  • we have heard, all of us, countless policymakers

  • worried about how to deal with these new risks

  • of job destruction, lower wages and tax leakage.

  • We've also heard company leaders

  • worried about aggressive competition from global platforms

  • eating up their local businesses.

  • And on the rational level, of course I understand.

  • After all, this is basic supply and demand economics.

  • If, in any market, you dramatically increase supply,

  • you should expect prices, profitability and growth to go down

  • for existing players.

  • But in my personal experience,

  • I've also seen the other side of the story.

  • Where online marketplaces,

  • like Gojek in Indonesia or Jumia in Africa,

  • have helped their business ecosystems and the communities around them.

  • The positive side I have seen

  • demonstrated itself in a woman, a taxi driver in Egypt,

  • that now had the opportunity to work

  • without the harassment she faced in the taxi business.

  • It demonstrated itself through a village in Kenya

  • that got an economic boost,

  • because the nearby beautiful but completely unknown lake

  • is now becoming a national ecotourism spot.

  • Online marketplaces will continue to grow.

  • And they will transform the way we shop,

  • the way we travel

  • and the way we transact with each other.

  • So we really need to understand

  • where is the truth between those two stories.

  • Should we expect more of the bright side

  • or more of the dark and worrying side?

  • And is there a way to get the first without getting the second?

  • I believe there is.

  • As a strategy consultant, I study businesses for a living.

  • And as a mathematician at heart,

  • I couldn't live with something and its opposite being equally true.

  • So, I went back to fundamentals, and I asked the question:

  • What do online marketplaces really do?

  • What do they do?

  • Well, at their core,

  • they're doing something very simple.

  • They match sellers and buyers.

  • That's it.

  • For drivers and passengers,

  • you get Uber, Grab in Southeast Asia

  • or DiDi in China.

  • For matching merchants and consumers,

  • you get Amazon, Alibaba or Jumia in Africa.

  • And for housing, you get Airbnb;

  • for fundraising, you get Kickstarter --

  • the list goes on.

  • What all these examples have in common

  • is that they transition this basic functionality

  • of matching sellers and buyers

  • from the physical world to the digital world.

  • And by doing so,

  • they can find better matches,

  • do it faster

  • and ultimately, unlock more value for everyone.

  • In fact, online marketplaces' core benefit

  • is that they get us more from the same amount of effort.

  • For example,

  • if you're a taxi driver in San Francisco

  • and you decide to work 10 hours per day,

  • then you're actually having a paying passenger in your car

  • for four hours out of the 10.

  • If you take the same car and put it on a platform like Uber,

  • you can have paying passengers

  • for an additional one and a half hours.

  • This is the same car becoming 40 percent more productive.

  • And the same has been proven true for other online marketplaces.

  • By design, they create more value for the economy.

  • Now, we need to figure out who gets this additional value.

  • You can give it to the drivers --

  • more passengers, more income.

  • You can give it to consumers, if you reduce prices.

  • Or you can decide that the platform gets to keep all of it.

  • What usually happens is that all three of them

  • would somehow split it.

  • But what about the rest of us?

  • We can also be impacted

  • without being on either sides of this business.

  • If my neighbor decides to rent his apartment on Airbnb,

  • and we have more people coming in and out of the building,

  • more noise than usual,

  • then I'm getting an unpleasant side effect of this productivity magic.

  • This is what economists would call a "negative externality."

  • The negative externality of Uber cars becoming more productive

  • is taxi drivers seeing the value of their licenses drop

  • by as much as 30 percent in New York, for example.

  • This is the dark side.

  • And this is what sparks street demonstrations

  • and sometimes, sometimes, even violence.

  • I profoundly believe this is avoidable.

  • And it became clearer to me

  • the more I have spent time in emerging markets.

  • In fact, during my time in Singapore,

  • I spent half of any given week traveling in the region,

  • between Malaysia, Thailand, Indonesia,

  • and I became a user --

  • actually, more of a fan --

  • of online marketplaces that were not that well-known back then.

  • But some of them made interesting strategic trade-offs

  • that dramatically reduced their side effects,

  • their externalities.

  • Take Gojek, for example.

  • They're basically Uber for motor bikes.

  • They are one of the most liked online marketplaces in Indonesia,

  • and this has a lot to do with the role they chose to play.

  • Instead of picking a fight

  • with every other transportation option out there,

  • they choose to gradually integrate them within their own platform,

  • so that without leaving the Gojek app,

  • you can check the public transportation schedule

  • and choose to take a bus for a long distance.

  • Then, maybe, a motorbike or a traditional taxi

  • that you can order and pay for from within the same app.

  • If you look at Gojek today,

  • nine out of 10 previous motor taxi drivers

  • believe their quality of life has improved after joining the platform.

  • And nine out of 10 consumers --

  • nine out of 10 --

  • believe that Gojek has a positive impact on society in general.

  • Now, this level of trust is what allowed Gojek to grow

  • into what is today a super online marketplace for everything

  • from food to grocery

  • even massages and laundry pickups.

  • It all came from a deliberate trade-off

  • to be an orchestrator of a bigger ecosystem

  • where others also have their role to play,

  • instead of a single winner, a hero,

  • that takes for himself what would, at the end, be a smaller pie.

  • Another interesting example is Jumia.

  • Jumia is the equivalent of Amazon in Africa.

  • But they don't generate the same level of fear

  • in the small-business community.

  • And one of the reasons for that

  • is because they have decided to actively invest

  • in African entrepreneurs,

  • to grow them into the digital age.

  • Now keep in mind,

  • Jumia is operating in countries with some of the lowest digital literacy

  • and digital connectivity scores in the world.

  • Now they could have dealt with that

  • the usual way, through lobbying for reforms --

  • and they probably do that --

  • but they have also built Jumia University,

  • an e-learning platform

  • where merchants can come and learn basic digital and business skills.

  • We have studied online marketplaces in Africa last year.

  • And during that study, we have met one of Jumia's merchants.

  • His name is Jomo.

  • He was fired from his job in 2014,

  • and at that time, he decided he wanted to become his own boss.

  • He wanted to be independent.

  • He also wanted to never be fired again.

  • So at that time,

  • Jomo had no clue what a business is.

  • So he needed to go through a series of trainings

  • to learn how to select products, how to price them

  • and how to promote them online.

  • Today, Jomo has a 10-employee online business.

  • And as of a few months ago,

  • he just opened his very first brick-and-mortar shop

  • in the suburbs of Nairobi.

  • Now, through its university,

  • Jumia has the potential of helping a huge number of Jomos.

  • And we have estimated that together with other online marketplaces

  • on the continent,

  • they can generate three million additional jobs by 2025.

  • And they would do that either directly,

  • or through their impact on the wider community.

  • And sometimes,

  • taking that wider impact into consideration

  • or forgetting about it

  • can make or break a platform.

  • To illustrate that, let's go back to Singapore.

  • So, when we decided with my wife to leave the country last year,

  • Uber decided to do the same.

  • At the same time,

  • again, we started to see that pattern,

  • but maybe it's a coincidence.

  • In reality, Uber lost the ride-hailing battle

  • to a Malaysian-born start-up called Grab.

  • Now, interestingly,

  • my wife didn't have the same level of concerns with Grab,

  • because when Grab started, it had a different name.

  • It was called MyTeksi,

  • and as the name suggests, it started as a platform for taxis.

  • So when Grab started expanding the driver pool beyond taxis,

  • it was seen as gradual and reasonable.

  • They were also very careful while doing so.

  • They thought of what kind of social safety net

  • they should bring to all drivers.

  • So they put in place special insurance packages

  • and even financial education programs.

  • Now, compare that with what happened in London,

  • in New York, in Paris,

  • where taxi drivers didn't feel that the platforms understood

  • they had to pay 200,000 euros for their license --

  • and mostly in loans.

  • When you don't take that kind of social environmental information

  • into account,

  • you get strong reactions.

  • I'm not trying to argue that the trade-offs

  • by either Grab or Jumia or Gojek are risk-free.

  • Did they slow down growth at some point, temporarily?

  • Maybe.

  • But look at them today.

  • Gojek is worth 10 billion dollars.

  • Jumia is one of only three unicorns in the whole of Africa.

  • And Grab, well, they pushed out Uber

  • out of the whole region of Southeast Asia.

  • And I also think these trade-offs have nothing specific to emerging markets.

  • Amazon or Uber or others can learn from them

  • and adapt them to their own realities.

  • In the long run,

  • this doesn't need to be a zero-sum game.

  • In the long run --

  • and this is maybe the Asian side of me speaking --

  • it pays to be patient.

  • It pays to reconsider your goal and your priorities

  • in the light of a much bigger equation

  • that includes you and your users, of course,

  • but also it includes regulators,

  • policymakers, your communities.

  • And I would argue, above all,

  • it includes the very businesses you are meant to disrupt.

  • Thank you.

  • (Applause)

Translator: Ivana Korom Reviewer: Krystian Aparta